Coca Cola Vs Pepsi

Coca-Cola vs Pepsi 21.01.
20
1. Compare Coca-Cola’s response to the changing marketing environment before

the arrival of Neville Isdell to that of PepsiCo
The Marketing Environment includes the Internal factors (employees,
customers, shareholders, retailers & distributors, etc.) and the External
factors( political, legal, social, technological, economic) that surround the
business and influence its marketing operations.

The first response of Coca-Cola to the changing marketing environment
before the arrival of Mr Isdell to that of PepsiCo, is where Coca-Cola made no
change to its strategy at the beginning after the death of Roberto Goizueta.
It continued as normal, ignore its competitor, PepsiCo, which was threatening
their existence. During that time, Coca-Cola was facing bungled takeovers,
disastrous product launches, contamination scares, and constant feuding
between factions within the management and boardroom.

In the 80s,Pepsi started coming out with campaigns that undermined Coke.
For example, a Pepsi ad came out which showed a group of retirement home
people dancing to rock ‘n roll when they get the wrong delivery of a Pepsi
crate instead of Coca Cola (Rutherford, 1994)

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2. Assess both companies in terms of their level of marketing orientation at that

time
Despite the change in consumer tastes, lifestyle and expectations, Coca-cola
is still focused on soft drinks.
Pepsi started considering itself as a “complete” beverage company. The
diversification further happened to include snacks and food items like potato
chips and oats. 1998: bought Tropicana, 2001: Bought Quaker oats &
Gatorade. While Coke still focused on soft drinks, Pepsi had interest in snack
food business. Build long term profit through customer satisfaction.
The result is that PepsiCo generates about 23 per cent of its worldwide profits
from the stagnant carbonated drinks sector, while Coca-Cola relies on fizzy
drinks for 80 per cent of profits.
Coca-Cola vs Pepsi 21.01.20
3. How world you position Coca-Cola and PepsiCo on the efficiency-effectiveness

matrix? Justify your answer
Pepsi and Coca Cola are two international soft-drink giants which control most of the
soft-drinks beverage business in the world.
In the efficiency-effectiveness matrix:
Pepsi thriving, they also increased turnover and exceeded Coca with their sales were
more than $67 billion compared with Coke of $47 billion in 2014.
Coca cola surviving: although they have been overtaken for some time, they still
generate huge amount of revenue.
4. What advantages, if any, does PepsiCo’s greater diversification give the

company over Coca-Cola?
Pepsi company will launch new product extension in the market due to consumer’s
psychological factors. Thus Pepsi Cola satisfies the consumer’s needs efficiently by
launching a desired product.
Pepsi diversified away from carbonated drinks and invested in new products.
Providing their consumers with easy-to-use, convenient and innovative containers
are one of their top priorities. Package introductions they've made over the years
include the industry's first 1 ½ liter bottle; Regular, Disposable; Can. Pepsico. was
the first company to respond to consumer preference with lightweight, recyclable,
plastic bottles.
In Diversification, a strategy for company growth through starting up or acquiring
businesses outside the company’s current products and markets. Pepsi related
diversification include Pepsi vitamin drink and unrelated diversification include Pepsi
T-shirts.
Having such a broad portfolio as they are not only provide beverages like Coke, they
provide food as well.
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5. Assess Coca-Cola ownership of Innocent drinks from the POV of both

companies
We think that it’s a mutually beneficial relationship, as Innocent associating its’ brand and
name with Coca-Cola. Because of Coke’s marketing and buying power and name as a
brand, Innocent can become a global brand and take its’ ethical values to the world’s
consumers.
To quote Richard Reed:
(The Guardian, 2013)

Not only from a marketing and business standpoint, two years after the initial takeover of
Coca-Cola, Innocent has continued its expansion to Europe with revenues of up to 250
million pounds, it has also diversified with food pots, fizzy drinks and coconut water.
From Coca-Colas’ perspective, the benefits are diversifying its portfolio, tapping into the
smoothie and fruit juice market and associating itself with a healthy drink.
Innocent head of brand and creative Dan Germain had to say about the business
relationship:
“They let us run the business in exactly the way we want to run it. Their stance is we
don’t know how to run your business, we can’t run your business.”
On their official website they seem to be quite transparent about their relationship with
Coca-Cola.
The main factor that may alienate people is that they could see innocent as selling
out to Coca-Cola, to a big global corporation, like many businesses beforehand. (Ben &
Jerry's, Body Shop and Green and Blacks)
6. What future challenges is Coca-Cola likely to face?
The next big challenge I think that future companies like Coca-Cola, so companies that are
involved in the soda industry will face will be how they deal the overall decline in sales, with
customers being more and more conscious of their sugar consumption and their overall
health. To remain competitive, it also has to diversify its portfolio as much as possible, so
that it depends less on coke as their main source of revenue (following Pepsi’s business
plan and their recent trends)
Coca cola’s 2020 vision
Sources:
https://www.theguardian.com/business/2013/feb/22/coca-cola-full-control-innocent
https://www.thejournal.ie/innocent-drinks-coca-cola-2073030-May2015/
https://www.innocentdrinks.co.uk/us/our-owner
https://www.youtube.com/watch?v=EHjoCgCbEpw - learning from coca-cola
https://www.thisismoney.co.uk/money/markets/article-2284704/Innocent-sells-Coca-Cola-sm
oothie-makers-founders-cash-stakes.html
https://www.businessinsider.com/what-is-the-future-for-the-coca-cola-brand-soda-sales-decli
ne-2015-4?r=US&IR=T

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Coca-Cola vs Pepsi 21.01.

1. Compare Coca-Cola’s response to the changing marketing environment before

2. Assess both companies in terms of their level of marketing orientation at that

3. How world you position Coca-Cola and PepsiCo on the efficiency-effectiveness

4. What advantages, if any, does PepsiCo’s greater diversification give the

5. Assess Coca-Cola ownership of Innocent drinks from the POV of both

(The Guardian, 2013)

6. What future challenges is Coca-Cola likely to face?

Coca cola’s 2020 vision

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